What are the advantages of a defined benefit plan?

At the risk of sounding un-American, the main advantages - besides the fact that you don't have to put your own money into it - are the lack of choice and the lack of responsibility.

Here's why. Studies have shown that 401(k)s and other defined contribution plans haven't been as successful as many proponents hoped. Turns out that when employees are given the choice of investing their own money for retirement, lots of them say no thanks, or else invest sums that are way too small to cover their retirement needs. The array of investment options - many plans have more than a dozen funds to choose from - can be another turnoff. And investors in those plans often earn lower returns than they expected.

A defined benefit plan delivers retirement income with no effort on your part, other than showing up for work. And that payment lasts throughout retirement, which makes budgeting for retirement a whole lot easier. You can even arrange to take a reduced payment so your spouse will continue to receive income if you die first.

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